Retailers Target Corp. (TGT), TJX Cos.
Inc. (TJX) and Macy's, Inc. (M) reported Wednesday profits for the
second quarter that topped analysts' estimates. Quarterly revenues at
Target and TJX also beat estimates, while it misses by a whisker at
Macy's. The improved results at the retailers were driven by gross
margin expansion.
Target and TJX raised its earnings guidance for the full year, while
Macy's maintained its earnings outlook for the full year.
In Wednesday's trading session on the NYSE, Target shares are up
20.22 dollars or 14.12 percent to trade at 163.43 and TJX shares are also
up 6.41 dollars or 5.64 percent to trade at 119.71, while Macy's shares are
down 2.41 dollars or 13.59 percent to trade at 15.33.
Discount retailer Target reported that second-quarter net earnings
soared to 1.19 billion or 2.57 dollars per share from 835 million or 1.80 dollars
per share in the year-ago quarter.
On average, 27 analysts polled by Thomson Reuters expected the
company to report earnings of 2.18 dollars per share for the quarter.
Analysts' estimates typically exclude special items.
Total revenue for the quarter grew 2.7 percent to 25.45 billion from
24.77 billion dollars in the same quarter last year, reflecting total sales
growth of 2.6 percent to 25.02 billion dollars and 10.8 percent increase in
other revenue. Analysts expected revenues of 25.20 billion dollars for the
quarter.
Total comparable sales increased 2.0 percent in the quarter, as
comparable store sales increased 0.7 percent and comparable digital
sales grew 8.7 percent.
Gross margin improved 190 basis points to 28.9 percent, reflecting
the net impact of merchandising activities, including cost
improvements.
"Importantly, our growth was driven entirely by traffic in stores and
our digital channels, with double-digit growth in our same-day
delivery services," said Brian Cornell, chair and CEO of Target
Looking ahead to the third quarter, the company expects earnings and
adjusted earnings in a range of 2.10 to 2.40 dollars per share on
comparable sales growth of 0 to 2 percent. The Street is looking for
earnings of 2.24 dollars per share for the quarter.
For fiscal 2024, the company now projects earnings and adjusted
earnings in a range 9.00 to 9.70 dollars per share on comparable sales
growth of 0 to 2 percent. Analysts expect earnings of 9.28 dollars per share
for the year.
Previously, the company expected earnings and adjusted earnings in a
range of 8.60 to 9.60 dollars per share on comparable sales growth of 0 to
2 percent.
Meanwhile, off-price retailer TJX reported that net income for the
second quarter grew to 1.10 million or 0.96 dollars per share from 989
million dollars or 0.85 per share in the prior-year quarter. Analysts
expected earnings of 0.92 cents per share for the quarter.
Net sales for the quarter increased 6 percent to 13.47 billion from
12.76 billion dollars in the same quarter last year, and topped analysts'
consensus revenue estimate of 13.31 billion dollars. Overall comp store
sales increased 4 percent, driven by an increase in customer
transactions.
Comp store sales at Marmaxx increased 5 percent, and Marmaxx sales
also grew 7 percent to 8.45 billion dollars. Comp store sales at HomeGoods
grew 2 percent and HomeGoods sales also increased 4 percent to 2.10
billion.
TJX Canada sales increased 2 percent to 1.24 billion dollars, while TJX
International (Europe & Australia) sales improved 4 percent to 1.68
billion from last year.
Gross profit margin improved 20 basis points to 30.4 percent from
last year.
Looking ahead to the third quarter, the company expects earnings in a
range of 1.06 to 1.08 dollars per share on consolidated comparable store
sales growth of 2 to 3 percent.
For fiscal 2025, the company now projects earnings in a range of
4.09 to 4.13 dollars per share on consolidated comparable store sales
growth of about 3 percent.
Previously, the company expected earnings in the range of 4.03 to
4.09 dollars per share on consolidated comparable store sales growth of 2 to
3 percent.
On average, analysts polled by Thomson Reuters expect the company to
report earnings of 1.10 dollars per share for the quarter and 4.14 per
share for the year.
The Company also continues to expect to repurchase approximately 2.0
to 2.5 billion dollars of TJX stock during the fiscal year ending February
1, 2025.
Additionally, the company said it has signed a definitive agreement
to make an investment of approximately 360 million dollars, subject to
customary working capital adjustments, for a 35 percent ownership stake in
Dubai-based privately-held off-price retailer Brands for Less (BFL).
The transaction is expected to close later this fiscal year. The
Company's ownership in BFL is expected to be slightly accretive to
earnings per share beginning in Fiscal 2026.
Omni-channel fashion retailer Macy's reported a net income for the
second quarter of 150 million dollars or 0.53 cents per share, compared to a net
loss of 22 million dollars or 0.08 cents per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was 0.53 per
share, compared to 0.26 per share in the year-ago quarter.
Net sales for the quarter declined 3.8 percent to 5.10 billion from
5.28 billion dollars in the same quarter last year.
On average, analysts polled by Thomson Reuters expected the company
to report earnings of 0.30 cents per share on net sales of 5.12 billion dollars
for the quarter. Analysts' estimates typically exclude special items.
Comparable sales were down 4.0 percent on an owned basis and down 3.3
percent on an owned-plus-licensed -plus-marketplace basis.
Macy's brand comparable sales were down 4.5 percent on an owned basis
and down 3.6 percent, on an owned-plus-licensed-plus-marketplace
basis.
Bloomingdale's brand comparable sales on an owned basis were down 1.1
percent and on an owned-plus-licensed-plus-marketplace basis were
down 1.4 percent. Bluemercury brand comparable sales were up 2.0
percent on an owned basis.
Gross profit margin improved 240 basis points to 40.5 percent from
last year.
Looking ahead to fiscal 2024, the company continues to project
adjusted earnings in a range of 2.55 to 2.90 dollars per share, but now
expects net sales between 22.1 billion and 22.4 billion dollars, down from
the prior forecast between 22.3 billion and 22.9 billion dollars.
The Street is looking for earnings of 2.78 dollars per share on net sales of
22.84 billion dollars for the year.(DPA)
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